Authority: High Court of Orissa at Cuttack

Order Date: 30 July 2026

Case Overview

  • Petitioners: M/s. Sag Projects Pvt. Ltd. and another; Opposite Party: M/s. Siddhartha Engineering Pvt. Ltd.
  • Four CRLMC petitions (Nos. 2471/2022, 2481/2022, 3244/2023, 3285/2023) were consolidated as they arose from the same Memorandum of Understanding (MoU) dated 10‑06‑2021.
  • The MoU stipulated technical service fees of 1.8% of the total contract value (Rs 69,18,480) payable in four instalments as per Clause 2.5(g).
  • Four cheques were issued by the petitioners in favour of the opposite party:
  • Cheque No. 013442 dated 30‑10‑2021 for Rs 29,54,700
  • Cheque No. 013441 dated 30‑01‑2022 for Rs 9,84,900
  • Cheque No. 013444 dated 30‑04‑2022 for Rs 9,84,900
  • Cheque No. 013445 dated 30‑07‑2022 for Rs 9,84,900
  • All cheques were dishonoured with reasons “Funds Insufficient”, “Account Blocked”, and “Account Closed”.
  • Statutory demand notices were served for each cheque; the petitioners failed to pay within the prescribed period.
  • Consequently, four criminal complaints under Section 138 of the Negotiable Instruments Act (NI Act) were filed before the S.D.J.M., Bhubaneswar as ICC Cases Nos. 929/2022, 2035/2022, 4155/2022, 6069/2022.
  • The trial court took cognizance of the offences on 18‑02‑2022, 08‑04‑2022, 09‑08‑2022 and 15‑11‑2022 respectively.
  • Petitioners sought quashing of the cognizance orders and the entire criminal proceedings under Section 482 of the Cr.P.C., arguing procedural lapses (non‑compliance with Sections 200 & 202 Cr.P.C.) and premature cheque encashment before the Letter of Acceptance (LOA) dated 22‑03‑2022.
  • Counsel for petitioners (Mr. Devashis Panda) contended that the cheque particulars were fraudulently entered in the MoU and that the magistrate failed to conduct a proper inquiry.
  • Counsel for opposite party (Mr. Laxmidhar Pangari) argued that the statutory presumption under Sections 118 & 139 NI Act operates against the petitioners and that the High Court should not intervene at the pre‑trial stage.
  • The judgment extensively cited Supreme Court precedents (e.g., Suo Motu Writ Petition (Crl.) No.2 of 2020, K.S. Joseph v. Philips Carbon Black Ltd., Maruti Udyog Ltd. v. Narender, Rangappa, Rajeshbhai Muljibhai Patel, Rathish Babu Unnikrishnan, Sanjabij Tari v. Kishore S. Borcar), emphasizing that:
  • An inquiry under Section 202 may be satisfied by examination of documents and affidavits.
  • The presumption under Section 139 is rebuttable but must be challenged at trial, not at the pre‑trial stage.
  • High Courts should not quash complaints where the statutory ingredients of Section 138 are prima facie established.
  • The Court rejected the petitioners’ claim of procedural non‑compliance, finding that the trial magistrate had considered the complaint, affidavit, cheque copies, demand notices, and MoU before taking cognizance.
  • The Court also rejected the merit-based arguments, noting that the statutory presumption under Sections 118/139 NI Act stands, and the petitioners must rebut it during trial.

Final Outcome

  • All four CRLMC petitions are dismissed.
  • The trial court is directed to proceed with the trial of the four criminal complaints without further delay, in accordance with Section 143(3) of the NI Act.

Topics: Legal Procedure, Cheque Dishonour, Criminal Complaint